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The Jones Act has already made Hawaii's economy really difficult, but it might be about to get really worse. Hawaii gets a third or more crude oil from Russia,
by triyambakam 5y ago
The Jones Act has already made Hawaii's economy really difficult, but it might be about to get really worse. Hawaii gets a third or more crude oil from Russia, and with recent sanctions, it's unclear if that will continue. If it doesn't that means Hawaii will need to purchase much more expensive oil from the mainland.
> It is much cheaper for Hawaii to buy oil from Russia than from the U.S., even though the per-barrel cost of oil from Russia is more expensive than from Texas.
> Blame the Jones Act. The 1920 federal maritime law requires all goods shipped between American ports to be on vessels that are U.S. flagged, built and mostly owned and crewed by Americans.
> The result of more than a century of protectionism has been that U.S. ships are more expensive to build and operate, with the additional costs inevitably passed on to consumers. In other words, the added cost of using American ships makes it more expensive for Hawaii to buy oil from Texas than from Russia. [1]
[1] https://www.grassrootinstitute.org/2022/02/jones-act-threatens-hawaii-energy-security/ https://www.grassrootinstitute.org/2022/02/jones-act-threate...
- neon_electro 5y agoDo you think the increase in price means renewable energy can get a bigger foothold?
- triyambakam 5y agoGiven the history of how Hawaii policy gets shaped, probably not. But thinking optimistically, hopefully!
- letitbeirie 5y agoSolar is already so prevalent on Oahu that they have grid frequency excursions that would be unimaginable on the mainland. Once grid-scale energy storage gets cheaper Hawaii will have one of the cleanest energy grids on Earth. Until then they have to complement their solar production with peaker turbines that typically burn diesel.
- triceratops 5y agoWhy can't Hawaii use geothermal energy?
- deleted 5y ago[deleted]
- retrac 5y agoHawaii does have a geothermal plant. It got covered in lava during a 2018 eruption and took two years to dig back out. Not sure if that's a freak incident or ill portent for its viability in Hawaii. Pre-eruption it supplied about 10% of the state's electricity. https://en.m.wikipedia.org/wiki/Puna_Geothermal_Venture https://en.m.wikipedia.org/wiki/Puna_Geothermal_Venture
- letitbeirie 5y agoHawaii (the island) can and does, but most of Hawaii (the state)'s electric demand is on Oahu where they haven't found any geothermal that's viable for making power. [0] https://www.hawaiianelectric.com/clean-energy-hawaii/our-clean-energy-portfolio/renewable-energy-sources/geothermal https://www.hawaiianelectric.com/clean-energy-hawaii/our-cle...
- retrac 5y agoValid criticism. But how would the USA maintain a merchant fleet in the face of much lower operation costs for operators under a different flag? Without the Jones Act, one might expect near-complete dependence on foreign-flagged ships for US shipping. That's a major vulnerability for a trade-oriented nation. Subsidies perhaps?
- _3u10 5y agoThe fleet is smaller than it would be without the Jones Act.
- wolpoli 5y agoIt wouldn't be fair for the cost of this national objective to fall onto Hawaii alone.
- supernova87a 5y agoAgreed. And not only Hawaii, many other places too. The costs fell on Puerto Rico when Congress refused to lift the Jones requirements to ease shipping costs even after the hurricane left them desperate for supplies. I guess the national priority fo ensuring a home-based merchant marine fleet outweighed people's need for toilet paper and medical supplies.
- dhc02 5y agoIF the domestic shipping fleet struggled or shrank without the Jones Act, the answer would be subsidies, rather than prohibition.
- colechristensen 5y agoAnd people would be making essentially the same complaints and essentially the same arguments about the subsidies (see agriculture subsidies)
- thrashh 5y agoYeah but people complain about all sorts of stuff. We haven’t gotten rid of the subsidies yet. Although in this scenario, we could subsidize oil to Hawaii. I don’t know how that could be sold but everyone already benefits from subsidies somewhere and everyone already subsidizes something else.
- Gwypaas 5y agoI don't get this doom and gloom. The population of Hawaii is 1.3 million, a third of the oil is from Russia. That is minuscule on the world scale. Oil is an extremely liquid trade, and Hawaii is already buying non Jones act oil. Jones Act itself is a problem, and a blessing. It ensures a US maritime industry but has due to lack of competition left it so far behind the world standard that the minute it is removed the entire sector will go bankrupt from international competition. The Decline of the U.S. Merchant Marine | What's Going on With Shipping? https://www.youtube.com/watch?v=kJn0bCWx_9g https://www.youtube.com/watch?v=kJn0bCWx_9g
- supernova87a 5y agoI agree. On a related topic, I think it's important that we have some low cost software developer labor to make sure that we have the ability to develop things cheaply and compete with other countries. I propose that we start by reducing your salary by 40% so that we've got some lower cost labor. It's miniscule on the world scale, so you shouldn't complain I suppose? I don't get the doom and gloom.
- Gwypaas 5y agoIs not that the thing? Working in software I am already competing with the world. My job could get out-sourced tomorrow, but apparently that does not happen. See the difference? Value vs. cost. Very different.
- mattnewton 5y agoHonestly and unironically yes, this sounds great. I don't want to build a career on protectionism. I would start a company tomorrow if quality software development labor was 40% cheaper, it would make so many use cases economical.
- worik 5y ago> it would make so many use cases economical. If exploiting desperate people is the measure an economical use case, no wonder business has a bad reputation
- asdff 5y agoI'm surprised an oil company hasn't tried to set up a free trade zone within hawaii yet.
- thehappypm 5y agoIt’s not just Hawaii. Massachusetts has to import its natural gas from Trinidad, rather than use much cheaper natural gas from the USA.